/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR RELEASE TO US NEWS WIRE SERVICES/
Announcement to the Australian Securities Exchange and Toronto Stock Exchange
PERTH, Western Australia, June 1 /CNW/ - The Board of CGA Mining Limited (TSX Code : CGA, ASX Code : CGX) ("CGA", the "Company") is pleased to announce a planned spin off of the Company's interests in the Segilola Gold Project in Nigeria and the Mkushi Copper Project in Zambia (the "African Projects") by way of the initial public offering of Ratel Gold Limited ("Ratel") (the "Spin Off"). Ratel is currently a wholly owned subsidiary of CGA.
The proposed Spin Off will provide CGA shareholders with an opportunity to realise enhanced value for the African Projects, which are in the exploration stage, and provides an opportunity to better manage exposure and investment in the various assets and jurisdictions.
CGA will retain a minimum 20% interest in Ratel and the balance of shares will be offered to CGA shareholders legally entitled to participate in the offer (based on a record date of 11 June 2010) and parties on the President's List, with any surplus to be available to the public.
Ratel has appointed Haywood Securities Inc. (the "Agent") as the Agent to the planned Initial Public Offering ("IPO") of Ratel. The IPO will involve the issue of up to 70,000,000 new common shares in Ratel, at an issue price of C$0.20 per share, raising gross proceeds of up to C$14,000,000. The Agent will undertake the IPO on a best efforts basis, subject to any required regulatory approvals and CGA shareholder approval. The net proceeds of the raising will be used to fund exploration and feasibility activities on the Segilola Gold Project and Mkushi Copper Project, plus general, administrative and working capital purposes.
"The creation of Ratel will provide CGA investors the opportunity to participate in exciting exploration stage assets in Africa, with near term development potential, without diluting CGA's balance sheet", stated Michael Carrick, President and CEO.
A preliminary draft prospectus has been lodged in Canada and the final will be lodged in both Canada and Australia. Given that CGA intends to seek shareholder approval for the planned Spin Off, a Notice of Meeting has also been lodged with the ASX and TSX. We recommend shareholders refer to those documents for further information.
The CGA Shareholders Meeting is planned for 2 July 2010 and the IPO is anticipated to close before the end of July 2010.
ABOUT CGA MINING LIMITED
CGA is listed on both the Toronto Stock Exchange and the Australian Securities Exchange. The Masbate Gold Project is the largest gold project in the Philippines and was successfully developed with first gold poured on 12 May 2009. The project, which is currently ramping up to full production, has a total indicated resource base of 4.55M ounces, total inferred resource base of 3.22M ounces with a probable reserve of 3.03M ounces of gold. At steady state operations the project is forecast to produce over 200,000 ounces per annum.
The 4Mtpa plant was constructed by Leighton Contractors Asia Limited ("Leighton") without one lost time injury. The mining contract for the Masbate Gold Project has been awarded to Leighton, the largest mining contractor in the world. CGA is completing a scoping study for the expansion of the plant throughput at Masbate.
CGA has a disciplined acquisition program focused on acquiring new gold projects with a substantial initial resource with the capacity to grow materially and where the development and operational experience of CGA can be applied to enhance shareholder value.
A preliminary prospectus containing important information relating to the securities discussed herein has been filed with securities commissions or similar authorities in certain jurisdictions of Canada. The preliminary prospectus is still subject to completion or amendment. There will not be any sale or any acceptance of an offer to buy securities until a receipt for the final prospectus has been issued.
The securities discussed herein have not been registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or the securities laws of any state of the United States, and may not be offered, issued, sold or otherwise distributed in the United States or to, or for the account or benefit of, any U.S. Person (as defined in Regulation S under the 1933 Act) or person in the United States absent such registration or an exemption from such registration requirements. CGA shareholders in the United States, that are U.S. Persons or that are purchasing for the account or benefit of U.S. Persons or persons in the United States will not be legally entitled to participate in the offering to CGA shareholders. The securities may be offered on a private placement basis to certain persons in the United States, that are U.S. Persons or that are purchasing for the account or benefit of U.S. Persons or persons in the United States as part of the President's List or surplus offers pursuant to certain exemptions from the registration requirements of the 1933 Act and pursuant to all applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy in the United States or to, or for the account or benefit of, a U.S. Person or person in the United States.
NATIONAL INSTRUMENT 43-101 AND JORC COMPLIANCE
Mr Geoff.G.Jones, F.Aus.I.M.M.CP Mng, CGA's Consulting Engineer, is acting as the Qualified Person in compliance with NI 43-101 and JORC reporting requirements with respect to this announcement. He has prepared and or supervised the preparation of the scientific or technical information in this announcement and confirms compliance with NI43-101 and JORC requirements.
Further information relating to the Masbate Project is included in the technical report entitled Technical Report on the Mineral Resources of the Masbate Deposit, Masbate Province, Republic of the Philippines for CGA Mining Limited prepared by Mining Associates Pty Ltd and available on SEDAR at www.sedar.com, lodged 8 July 2008.
Andrew James Vigar of Mining Associates Pty Ltd, a qualified person, has verified the resource statement for the Masbate Project as disclosed in this announcement, including sampling, analytical and test data underlying the estimate. Verification of the data included numerous site visits, database validation of historical drill results and review of sampling and assaying protocols. The qualified person was satisfied with the verification process.
A NI 43-101 compliant report has been lodged on www.sedar.com verifying and supporting the new reserve statement made for the Masbate Project. Mr Daniel Tuffin, previously of Lower Quartile Solution Pty Ltd, a qualified person, has verified the reserve statement for the Masbate Project as disclosed in this announcement, including sampling, analytical and test data underlying the estimate. Verification of the data included database validation of historical drill results and review of sampling and assaying protocols. The qualified person was satisfied with the verification process.
Mr. Alfred John Gillman of Odessa Resources Pty Ltd, an independent qualified person experienced in the style of mineralisation at Segilola, has completed the resource statement for the Segilola Project as disclosed in this announcement, including verification of the sampling, analytical and test data underlying the estimate. Verification also included a site visit, database validation of historical drill results and a review of sampling and assaying protocols. The qualified person was satisfied with all of the protocols used during the drilling, sampling and in the Segilola resource estimate compilation and computation.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This announcement includes certain "forward-looking statements" within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, included herein including, without limitation, milestones related to the Masbate Gold Project and other projects, production estimates and CGA's future operating or financial performance, are forward-looking statements. Forward-looking statements involve various risks and uncertainties and are based on certain factors and assumptions. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from CGA's expectations include uncertainties related to fluctuations in gold and other commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for cooperation of government agencies in the development of CGA's mineral projects; the need to obtain additional financing to develop CGA's mineral projects.; the possibility of delay in development programs or in construction projects and uncertainty of meeting anticipated program milestones for CGA's mineral projects; and other risks and uncertainties disclosed under the heading "Risk Factors" in CGA's Annual Information Form for the year ended 30 June 2009 filed with the Canadian securities regulatory authorities on the SEDAR website at www.sedar.com.
SOURCE CGA Mining Limited
For further information: For further information: Australian Contact, President & CEO - Michael Carrick, Tel: +61 8 9263 4000, Fax: +61 8 9263 4020, Email: email@example.com; US Contact, Independent Chairman - Mark Savage, Tel: (505) 344-2822, Fax: (505) 344-2922, Email: firstname.lastname@example.org